Boasberg’s ruling, which is not yet available online, was based on clauses in the U.S. Constitution that state that no person shall be deprived of life, liberty, or property without due process of law (the Due Process Clause), and that the regulatory authority of the federal government may only ultimately rest with individuals appointed by the President of the United States and confirmed by the Senate (the Appointments Clause). In keeping with the precedent set by an 1886 Supreme Court ruling in a case involving the Southern Pacific, all rights the Constitution grants to persons are also granted to corporations. Boasberg found that Section 207’s vesting of regulatory power with an entity that is also a participant in the industry subject to regulation violated the Due Process Clause, and that vesting the ultimate power to settle disputes concerning the metrics and standards with an arbitrator appointed by the DOT violated the Appointments Clause.
In July 2013, the U.S. Court of Appeals for the D.C. Circuit panel comprised of George W. Bush appointees, in the same case, ruled in AAR’s favor by finding that Amtrak is a private company that may not be granted regulatory powers, overturning a May 2012 ruling by the District Court that Amtrak is a governmental entity. But in a unanimous March 2015 decision, the Supreme Court overturned that ruling, declaring that for the purposes of the constitutional clauses in question, Amtrak shall be considered as part of the government, but remanded the questions of due process and appointments back to the lower courts. Thursday’s District Court ruling establishes the principle that while Congress may create companies that act commercially within an industry, and may also create regulatory bodies, it cannot create entities that do both at the same time. In this case, the thing for which Amtrak and freight railroads are competing is not customers, but rather finite track capacity.
In earlier filings before the Supreme Court, the U.S. Chamber of Commerce, the Cato Institute, the Center for Constitutional Jurisprudence, the Center for the Rule of Law, the Association of Independent Passenger Rail Operators (whose member firms aim to compete with Amtrak in operating intercity passenger trains), and law professor Alexander Volokh sided with AAR, while the National Association of Railroad Passengers, the Environmental Law and Policy Center, and some local rail passenger advocacy groups sided with DOT.
In the 20 months between the D.C. Circuit and Supreme Court rulings, Amtrak’s system wide on-time performance declined.
In essence, we are dealing with two equivalently viable economic metrics: differential economic value of track slots based on time of day and frequency of passenger trains; OTP of passenger trains requiring consistent reliability of schedules. Are these two economic values so diametrically opposed?
Amtrak lost the past 10 years prior to Wick Moorman to establish its credibility with the Class 1s and to deal with the issues on a level playing field, without simply reverting to the courts to resolve. Public litigation is not a permanent resolution. An unanswered question remains what was Amtrak’s involvement during the time of Class 1 mergers and mainline and lanes of track abandonment? If nothing was ever injected by Amtrak into the process, that only adds fodder to the concept that Amtrak has rigidly held to but the routes and schedules it inherited in 1971, without consideration of future growth-freqeuncies and route expansion.
Despite the court decision, we still have actual examples today of passenger railroading working well within the economic requirements and operational context of Class 1s, e.g., California JPAs on the UP, Chicago Metra on the BNSF. Amtrak needs to recalibrate its overall, and in particular, economic relationship with the Class 1s.
Track capacity is the limit of trains that can operate over a segment of track, meeting a minimum acceptable standard of on-time performance and operating costs. The baseline is the existing traffic over that line, and then the issue is how many trains can be added (or need to be subtacted) to keep within the limits of cost and performance. Since the carrier is a business, it is a complex decision involving many factors. Costs such as maintenance, improvements, fuel, crews, equipment depreciation, etc are on one side, and gross income contribution for EACH train handled on the other. Everything that effect the bottom line must be factored in to stay in the black and keep stockholders satisfied. It’s a business folks, just like Walmart, Microsoft or Exxon, and the enjoyment we receive from observing it is essentially immaterial to their goals of continued existance. If the choice is between adding a train generating a million dollars net per year, or one adding only a few thousand, which would you choose?
When Amtrak was created, their trains basically replaced existing passenger traffic while eliminating other lesser passenger trains, so the effect on track capacity was either neutral or positive, and there was excess capacity already due to dwindled freight traffic. To stay afloat, the infrastructure was made leaner, and recent increases in freight traffic has strained the current capacity, which is difinitely finite. Increasing future capacity through infrastructure and technology will be expensive and require a lot of new revenue to warrant it, and Amtrak just doesn’t throw that much cash into the pot. Many lines are so crowded with traffic that generates a lot more net revenue per train than Amtrak does, that business-wise they would be far better off replacing those pasenger trains with additional freight. Only governmental regulations keep the passenger cars on those tracks, and even the lower-traffic lines see public transportation more as a good-will gesture than a profitable endeavor. Improving intercity passenger traffic is certainly important to our national future, but businesses must also operate in the present. Want to improve passenger service – sure! Show me the money!
George: you can model the number of trains that can reasonably run through the infrastructure during a given time period. Sort of a giant train simulator program without the graphics, it charts the movements of trains. You can see the trains moving around the track chart like a giant dispatching screen. Bottlenecks quickly become apparent. LTK engineering does this work and other software is out there too.
Of course, Gerald is correct that operating practices also impact track capacity. Most obviously, speed. If switching takes twice as long because getting off moving equipment is prohibited. How much power freight trains are given. Or passenger trains.
How do you measure track capacity? Is there an equation of some sort? What are the units of measurement?
GERALD MCFARLANE is almost right. If you have enough resources, you can increase capacity on a given line to whatever capacity you need. There is no set limit. The limiting factor though, comes long before what is technically possible, when as Nick Korstange eloquently pointed out, the resources needed to provide desired capacity isn’t provided by the (in this case) trains using it. And if an Amtrak train that generates $1000 in revenue can be replaced by a train that provides $10,000 in revenue to the host railroad, it isn’t just the host railroad that benefits, its the business whose freight is being moved that benefits, and the customers that the freight is going to that benefits. And the reduced resources used to move the freight by rail instead of by truck and thus the environment that benefits. I dare say that’s more than Amtrak can claim. Yes, by raw numbers, Amtrak uses less fuel per passenger than if each one of them drove, but that’s just raw fuel/passenger numbers. Amtrak consumes a lot of additional resources that aren’t factored into that figure, as evidenced by their negative bottom line year over year. If Amtrak has any hope of competing against that, they need to play as nice as they can with the freight railroads, and keep their other expenses as low as possible to keep the politicians happy with them. (A zero subsidy wouldn’t hurt, but just Amtrak making the effort to reduce it would help.) That’s what we need to be pursuing if we want to see Amtrak succeed.
@GERALD MCFARLANE…..Actually there is finite capacity. At some point you will surpass to capacity of the rail system and achieve gridlock.
@Robert McGuire…technically it’s not justice, and saying there’s finite rail capacity is basically untrue as well…capacity is only limited by old fashioned operating practices and inadequate infrastructure investment.
I guess there is some justice in this country after all. And, from an Obama appointee. Whoda thunk?
Legalese at its best. Let Federal Express hold up Southwest and watch the fur fly.